Phuket Tourism at Ground Zero

PHUKET: While the term ‘ground zero’ became the idiom for the 9/11 attacks in New York in 2001, the phrase is far older than that, dating at least as far back as the Manhattan Project and the World War II bombing of Hiroshima.

On the heels of Saturday’s tragic events in Bangkok, Thailand’s tourism industry has become the global poster child for what the media is calling an explosion that is expected to hit hotels throughout the country.

After speaking to hotel executives about Phuket, it is evident that for the moment the nation’s capital remains an isolated epicenter of both metrics and opinion.

Kevin Wallace, President of leading Thai hotel chain Centara, says: “Bookings outside Bangkok are holding up very well and we are at 100% in Phuket, Krabi, Pattaya and Hua Hin, and are in fact overbooked in Samui, with no cancellations yet in these destinations.”

In Patong, Wolfgang Meusberger, General Manger of the Holiday Inn, is taking a longer term view, commenting: “So far, cancellations are slightly up versus the usual patterns, about 20% for the upcoming week. We expect more cancellations to come in as today is the first working day after the weekend.”

He continues: “For next week bookings might go up as customers are leaving Bangkok for the Songkran holiday. But the new booking pace has definitely eased and shows a reduced trend for April, May and June.

“Many customer inquiries are being made about safety in Phuket. There have been cancellations from groups who planned to have a joint Bangkok and Phuket schedule.”

He concludes that, “The longer the [protest] situation goes on, the more cancellations will come.”

According to historical market demand, the period of mid-April to the end of June constitutes the deepest downward spike for occupancy in Phuket. May is widely considered the worst trading month of the year, so perhaps it’s fitting that the run-up to May this year comes on the heels of events which will create considerable volatility.

But Pieter van der Hoeven, Corporate Director of Sales and Marketing Asia for Outrigger Laguna Phuket Resort and Villas, reports that his property has seen “no cancellations at all.” He confirms, however, that, “bookings have tailed off… [but that this] “is somewhat expected on the cusp of the low season.”

One of the most compelling trends during the recent global financial crisis was the strong decline of long haul tourism, which was replaced by short haul regional travel that propelled increasing amounts of traffic.

In Kamala, General Manager Andrew Whitaker of Andara Resort Villas says: “We have had some cancellations from short haul feeder markets, namely Hong Kong and Taiwan. It is a great pity that the travel advisories that have been put out do not clearly state that Bangkok is the only affected area, as life here in Phuket goes on as normal.”

Going forward, the challenges for Phuket’s tourism industry could fill a basket. One of 2009’s compelling storylines was a rebound which carried visitor arrivals back up to the 2007 level of 2.9 million. Airlift was a huge driver, with the reinstatement of many routes canceled after the 2004 Asian tsunami, and new direct flights added into the destination.

If the political situation continues unstable for a sustained period, the likelihood of direct-flight cancellations or reductions from important feeder markets such as Hong Kong and Singapore could set back Phuket’s development cycle. Playing into this critical issue is the recent Thai Airways price hike of 46% on the Bangkok–Phuket route.

Adding to these concerns is the oil market, where prices look set to increase over the US$ 85 a barrel level, bringing increased potential for damage to air travel.

While growing tensions in Bangkok are perceived to be widening the divide on the way forward for Thailand, tourism has been relegated to the uncomfortable position of passenger.

Bob Geldof captured the trauma felt after a shooting spree left countless dead in the song “I don’t like Mondays”. But truth be known, regardless of the events which many in Phuket feel are a world away, the days of the week are sure to follow… and most of us wait in anticipation of what tomorrow will bring.

— Bill Barnett